Macro-micro feedback links of water management in South Africa : CGE analyses of selected policy regimes
The pressure on an already stressed water situation in South Africa is predicted to increase significantly under climate change, plans for large industrial expansion, observed rapid urbanization, and government programs to provide access to water to millions of previously excluded people. The present study employed a general equilibrium approach to examine the economy-wide impacts of selected macro and water related policy reforms on water use and allocation, rural livelihoods, and the economy at large. The analyses reveal that implicit crop-level water quotas reduce the amount of irrigated land allocated to higher-value horticultural crops and create higher shadow rents for production of lower-value, water-intensive field crops, such as sugarcane and fodder. Accordingly, liberalizing local water allocation in irrigation agriculture is found to work in favor of higher-value crops, and expand agricultural production and exports and farm employment. Allowing for water trade between irrigation and non-agricultural uses fueled by higher competition for water from industrial expansion and urbanization leads to greater water shadow prices for irrigation water with reduced income and employment benefits to rural households and higher gains for non-agricultural households. The analyses show difficult tradeoffs between general economic gains and higher water prices, making irrigation subsidies difficult to justify.
|Date of creation:||01 Nov 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Esther Velázquez & M. Alejandro Cardenete & Geoffrey J.D. Hewings, 2007.
"Water price and water reallocation in Andalusia. A computable general equilibrium approach,"
07.04, Universidad Pablo de Olavide, Department of Economics.
- Esther Velázquez & M. Alejandro Cardenete & Geoffrey J.D. Hewings, . "Water Price and Water Relocation in Andalusia. A Computable General Equilibrium Approach," Regional and Urban Modeling 283600101, EcoMod.
- Dorrit Posel & Daniela Casale, 2003. "What has been happening to Internal Labour Migration in South Africa, 1993-1999?," Working Papers 03074, University of Cape Town, Development Policy Research Unit.
- Matete, Mampiti & Hassan, Rashid, 2006. "Integrated ecological economics accounting approach to evaluation of inter-basin water transfers: An application to the Lesotho Highlands Water Project," Ecological Economics, Elsevier, vol. 60(1), pages 246-259, November.
- Roe, Terry & Dinar, Ariel & Tsur, Yacov & Diao, Xinshen, 2005. "Feedback links between economy-wide and farm-level policies: With application to irrigation water management in Morocco," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 905-928, November.
- Choe, Chung & Chrite, E. LaBrent, 2009. "Internal Migration of Blacks in South Africa: Self-selection and Brain Drain," IRISS Working Paper Series 2009-06, IRISS at CEPS/INSTEAD.
- Noelwah R. Netusil & Thomas R. Harris & Chang K. Seung & Jeffrey E. Englin, 2000. "Impacts of water reallocation: A combined computable general equilibrium and recreation demand model approach," The Annals of Regional Science, Springer, vol. 34(4), pages 473-487.
- Maria Berrittella & Katrin Rehdanz & Richard S.J. Tol, 2006.
"The Economic Impact of the South-North Water Transfer Project in China: A Computable General Equilibrium Analysis,"
2006.154, Fondazione Eni Enrico Mattei.
- Maria Berrittella & Katrin Rehdanz & Richard S.J. Tol, 2006. "The Economic Impact Of The South-North Water Transfer Project In China: A Computable General Equilibrium Analysis," Working Papers FNU-117, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2006.
- David Finnoff & Arthur Caplan, 2004. "A Bioeconomic Model of the Great Salt lake Watershed," Working Papers 2004-14, Utah State University, Department of Economics.
- Thurlow, James & van Seventer, Dirk Ernst, 2002. "A standard computable general equilibrium model for South Africa," TMD discussion papers 100, International Food Policy Research Institute (IFPRI).
- Deborah Peterson & Gavan Dwyer & David Appels & Jane Fry, 2005. "Water Trade in the Southern Murray-Darling Basin," The Economic Record, The Economic Society of Australia, vol. 81(s1), pages S115-S127, 08.
- Daniela Casale & Colette Muller & Dorrit Posel, 2004. "'Two Million Net New Jobs': A Reconsideration Of The Rise In Employment In South Africa, 1995-2003," South African Journal of Economics, Economic Society of South Africa, vol. 72(5), pages 978-1002, December.
- Johansson, Robert C., 2005. "Micro and macro-level approaches for assessing the value of irrigation water," Policy Research Working Paper Series 3778, The World Bank.
- Diao, Xinshen & Roe, Terry & Doukkali, Rachid, 2005. "Economy-wide gains from decentralized water allocation in a spatially heterogenous agricultural economy," Environment and Development Economics, Cambridge University Press, vol. 10(03), pages 249-269, June.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:4768. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.